J.P. Morgan Asset Management is acquiring a 31-story office tower in midtown Manhattan for around $750 million, several sources say.
The building at 425 Lexington Ave. is one of two midtown skyscrapers being auctioned off by the real estate investment and development firm Hines, the other being the 27-story 499 Park Ave.
J.P. Morgan Asset Management's apparent decision to purchase the 750,000-square-foot tower comes roughly a month after a large lease was struck to keep the bulk of the tower's space, about 600,000 square feet, occupied for the next 20 years.
In that transaction, law firm Simpson Thacher & Bartlett renewed its space in the office tower, a commitment that immediately changed the complexion on the deal for 425 Lexington Ave. With a guaranteed tenant, the tower immediately went from a bet on the midtown leasing market to a far safer investment more resembling a bond. As expected, the tower was snapped up by an institutional buyer.
The building is one of only a handful of skyscrapers to be sold. Those that have traded hands have gone for premium prices, some as high as $1,000 per square foot paid during the last real estate boom. In another big deal, an office tower at 237 Park Ave. was sold earlier this year for around $800 million.
It wasn't clear as of press time if Hines' other building, at 499 Park Ave., has found a buyer yet.
A team of brokers from Eastdil Secured and CBRE Group Inc. handled the sale for Hines.
This story originally titled "JPMorgan unit said to buy 425 Lexington" appeared on the website of Crain's New York Business, a sister publication of Pensions & Investments.